Banking stocks slide as U.S. credit worries rattle global markets
Shares in global banking and financial stocks fell sharply on Friday after concerns about credit risks in U.S. regional banks sparked a selloff. The decline follows disclosures by Zions Bancorp and Western Alliance that highlighted potential loan losses and alleged fraud, raising fears about lending standards more than two years after the Silicon Valley Bank collapse.
The selloff spread quickly from Wall Street to Asia and Europe, with European banks such as Deutsche Bank and Barclays falling over 5%, and Societe Generale down 4.6%. In the U.S., Citigroup lost 5.5% in Frankfurt trading, while JPMorgan shares dropped 3%. The SPDR S&P Regional Banking ETF also fell 2.4% in premarket trading, News.Az reports, citing Reuters.
Investors are concerned that gaps in lender oversight, highlighted by the collapse of auto parts maker First Brands and subprime lender Tricolor, could signal broader risks in private credit markets, which have grown rapidly but remain lightly regulated.
Wall Street analysts noted that while large U.S. banks have reported strong earnings, high valuations combined with renewed worries about regional banks may intensify market jitters. OCBC Bank’s Vasu Menon warned that these developments could exacerbate uncertainty in markets already coping with high levels of concern.
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